Volatile session takes Nifty below 9000-mark

■ Negative global cues, virus fear lead to last hour sell-off

Moody's Investors Service lowered India's GDP growth forecast for 2020 calendar year to 5.3 per cent, on coronavirus implications on the economy. Moody's had in February projected a 5.4 per cent real GDP growth in 2020. This too was a downgrade from 6.6 per cent forecast earlier. The 5.3 per cent real GDP growth forecast for 2020 compares with 5.3 per cent growth estimate for 2019 and 7.4 per cent in 2018.

A late selloff led to a 2.5per cent fall in Sensex and

Nifty-50, triggered by a sharp fall in the European markets and indications that US market would also open weak after US benchmark Dow Jones suffered its worst overnight fall by

12.9 per cent over the rapid spread of coronavirus cases outside China.

The number of confirmed coronavirus cases worldwide stood at

186,900, with 7,477 deaths. US cases jumped to 4,743, with 93 deaths, while in Europe, Italy was the worst hit with close to

2,000 people dead.

In India, confirmed cases stood at 137 with three deaths reported so far, the latest being a death reported from Mumbai.

Not only is the number of new Covid-19 cases and deaths rising but the daily percentage gains are accelerating, said a report.

After a volatile session, which saw benchmark indices often trading in the green, there was a sharp selloff in the last half an hour of trade, which led the Sensex to drop 810.98 points to close at 30,579.09 points, registering a 2.58 per cent decline. The broader

Nifty-50 Index closed below the 9,000 level at

8,967, down by 230.35 points, or 2.5 per cent. The

Nifty-50 hit a high of

9,403.80 intraday and a low of 8,915.60 as volatility index India VIX jumped 7 per cent to 63 levels, its highest in over a decade.

Both the key indices hit fresh three-year lows on Tuesday as Covid-19 showed no signs of abatement and investors tried to save their investments by booking profit wherever they could.

Financials were the worst affected, with the Nifty Bank Index down by

4.10 per cent, led by heavy selling in private banks. IndusInd Bank lost 9.20 per cent, followed by ICICI Bank (-8.92 per cent), Kotak Mahindra Bank (4.64 per cent), Axis Bank (4.51 per cent) and HDFC Bank (-2.33 per cent). State-run State Bank of India shed 4.23 per cent.

Among the smaller banks, Federal Bank declined 7.99 per cent and City Union Bank fell by

3.02 per cent. Investors saw wealth erosion by Rs 2.11 lakh crore, as the BSE's market capitalisation fell to Rs

1,19,52,066.11 crore as against Rs 1,21,63,952.59 crore on Monday.

Losses in the broader market were lower. The BSE Mid-cap Index was down 1.84 per cent while the BSE Small-cap Index was down 2.27 per cent.

The foreign portfolio investors (FPIs) were net sellers of equities worth Rs 4,044.69 crore, the second highest one-day selling in March. Domestic institutions were net buyers by Rs 3,422.12 crore.

"Month to date, FPIs have pulled out Rs 51,000 crore from the domestic market, led by weak global cues on the worries of a slowdown across the globe. Coronavirus fear is intensifying worldwide and fresh travel bans seem to hurt the global economic sentiment," said forex consultant IFA Global.

"Global markets are in meltdown as the pandemic spreads, with roughly

$14 trillion in shareholder value erased and even safe assets such as gold have been sold to cover losses," IFA Global said.